Fast-growing jet card and on-demand charter operator FlyExcluisve, which had been hiring at a rapid pace, on Friday announced layoffs.
The company had doubled its headcount from around 400 to over 800 during the past two years, so the layoffs amount to a reduction of about 6.25%.
At the same time, its fleet has grown from 55 in December 2020 to 90 private jets currently.
In a memo to employees, obtained and published by a local news website, President Tommy Sowers wrote, “It is with a heavy heart we report, as part of our previously announced cost reduction program, we will begin restructuring select positions throughout the operations, maintenance, and HR departments.”
The letter continued, “This was one of the hardest decisions we have had to make, and it was not made in haste, but rather with a great deal of thought and consideration to ensure the long-term health and success of the company.”
A spokesperson tells Private Jet Card Comparisons, “FlyExclusive is implementing several changes to position the company in a competitive market, operate more efficiently, and allow for future growth and investments. On Friday, we made the difficult decision to eliminate approximately 50 positions. These decisions are never easy, but we have provided resources to support those impacted.”
The company previously said it expects future growth to generate a workforce of around 2,500 employees. Except for pilots, who are home-based, most of the future additions will be in its Lenoir County base.
The new aircraft are part of a fractional ownership program it is launching in what is becoming a crowded field.
According to research with subscribers of Private Jet Card Comparisons, flyers using fractional programs tripled year-over-year.
Industry leader NetJets says it is sold out of delivery slots until early 2024.
In addition to the IPO, new aircraft orders, and fractional program, FlyExclusive has been on a vertical integration push. It has been building new facilities at its home base Kinston Regional Jetport.
In the past 18 months, it has opened facilities for interior refurbishment, painting, and maintenance. It also set a goal to bring 85% of repairs in-house.
During NBAA, Owner and CEO Jim Segrave revealed plans to acquire simulators for in-house pilot training, another step in the vertical integration strategy.
Industry executives during Corporate Jet Investor say operators are still struggling against Covid-related supply chain delays, including delays in getting airplanes fixed quickly.
The FlyExclusive layoffs also come as the industry sees private jet charter flight activity falling below last year’s record levels, although demand is still higher than before Covid.
FlyExclusive is apparently still in growth mode. Its website is currently advertising for pilots, upholstery and sewing specialists, sales, and quality control positions.
Its Jet Club jet card program, launched in late 2019, increased market share to 8.6% from 3.7% year-over-year while seeing consideration increase by 41.2% compared to 2021, the largest gain of any major player.
However, with industry jet card hourly prices increasing by over 30% since the end of 2020, new since Covid private flyers who say they will fly privately regularly dropped from 57% to 40% year-over-year.
Richard Koe, Managing Director of WingX says, “Business jet activity is steadily slipping off post-Covid highs, although it’s likely 2022 will still conclude with a low double-digit gain on 2019. That said, there is now a marked decline in charter activity.”